dunno if I messing something but for the steam version I had to do it a little different
I found this tutorial that also worked with KID
1. Place "Texmod.exe" in the Binaries folder.
2. Rename "MassEffect.exe" (or "MassEffect2.exe") to anything you want (example: "MassEffectOriginal.exe").
3. Rename "Texmod.exe" to "MassEffect.exe".
4. Launch "Masseffect.exe" (=renamed Texmod) through Steam.
5. Point Texmod to your original "Masseffect.exe" (now renamed)
This renaming process is only necessary the first time you set up, you can leave it like this and every time you launch ME1 or 2 through Steam (whichever you set up) it will launch Texmod instead and you can start the 'real' .exe through Texmod (example: "MassEffectOriginal.exe").